There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the options given below.
Assertion (A): There is a third element of BoP (apart from the current and capital accounts) called errors and omissions.
Reason (R): It is difficult to record all international economic transactions accurately.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
Assertion (A): There is a third element of BoP (apart from the current and capital accounts) called errors and omissions. — True. Besides the two accounts, the BoP has errors and omissions.
Reason (R): It is difficult to record all international economic transactions accurately. — True. Many transactions are missed or recorded wrongly.
Why R explains A?
Errors and omissions exists because recording is never fully accurate. This element takes care of the gap that the faulty records leave. So R gives the reason for A.
NCERT (2026-27): “Errors and Omissions It is difficult to record all international transactions accurately. Thus, we have a third element of BoP (apart from the current and capital accounts) called errors and omissions which reflects this. …” |